Very Tightly Wound

With the exception of a tiny cluster of companies such as Patek Philippe, Girard-Perregaux, and Rolex--which are fully vertical and produce most or all of their own parts--high-end watch brands are really just elaborate branding machines. Your typical company--and this would include superstar marques like IWC and Panerai--designs the various parts of the watches and then farms out the manufacturing to specialized Swiss and German shops. Kobold is no exception. The company imports parts and assembles them into watches in Pittsburgh.

If you toss aside precious materials like gold and platinum, which can push the price of the bracelet alone to $10,000, the most expensive part of a watch is the movement, the assembly of gears and springs that makes it work. In most basic terms, a mechanical watch uses the energy of a wound spring to turn gears that move the hands in a consistent fashion. Many mechanical watches today are self-winding (or automatic, in the jargon); they use the motion of the wearer's arm to keep the spring wound.

Building a movement, with its 130 or more parts, is complex and expensive, and so most companies buy them from one of three Swiss manufacturers: ETA, Lemania, and Sellita. (Presto: "Swiss Made"!) Companies will make modifications to movements, adding adornments and functions, which are called complications.

Today 90 percent of the watches sold are battery-powered quartz watches, but the other 10 percent, the mechanicals, account for 62 percent of the Swiss exports in terms of value. It equates to some $6.1 billion at wholesale, probably $20 billion at retail. The Swatch company, a juggernaut built on quartz technology, is now the world's dominant player in mechanical watches, too; among other companies, it owns Omega and Longines, as well as the movement concern ETA.

A quartz watch, which is essentially a tiny computer, will always be more accurate than a machine powered by springs. To be Swiss certified, a mechanical watch need only be accurate within six or so seconds over the course of a day, and no mechanical watch will ever promise 100 percent accuracy. Rather, what attracts buyers, what makes men spend five figures on a watch, is the craftsmanship. Consider for example the Calibre 89, created for Patek's 150th anniversary in 1989. It took nine years to develop, is worth $6 million, and has 33 complications, including a thermometer and "sidereal timing," which has to do with the hour angle of the vernal equinox. Why anyone would want a watch that displays a measurement this obscure tells you a lot about collectors of high-end watches.